Value Added Tax

VAT: treatment of vouchers

The government will implement an EU Directive on the VAT treatment of vouchers to ensure that the correct amount of VAT is charged on what the customer pays, irrespective of whether payment is with a voucher or other means of payment.

This measure introduces legislation providing for the VAT treatment of vouchers issued on or after 1 January 2019. It affects only vouchers for which a payment has been made and which will be used to buy something. The measure does not apply to vouchers issued before 1 January 2019, for which existing rules will continue to apply.

From

From 1 April 2019

From 1 April 2018

Standard rate

20%

20%

VAT fraction

1/6

1/6

Reduced Rate

5%

5%

Annual Registration Limit

£85,000

£85,000

Annual Deregistration Limit

£83,000

£83,000

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